In your opinion whats the biggest risk with using hard money?

First, if you "sell it now" and then continue to do the work you put yourselves and your buyer at risk as you will be acting as an unlicensed contractor.

Hi Terre, my guess would be that it could be one of a few things, Lenders dont know how to handle it from a conventional or FHA angle and the interest on a commerical loan may not make the numbers worth the risk. 

Any other low-risk options or should I stay on the track I'm going, pay as I go???

Any other low-risk options or should I stay on the track I'm going, pay as I go???

Depending on someone's personality and drive will determine their willingness to take on risks. 

I'm right there with you on starting with single family because as an investor it puts less pressure on you and you're not risking as much.

Only you can decide if you're willing to take on that kind of risk. $120k in unforeseen repairs, amortized over 30 years, wipes out your cashflow.

Lower financial risk if we had a longer vacancy or costly repairs because the rental expenses are lower. 

You could see if the seller would be willing to carry a 2nd mortgage for the 10% your missing.